Walking The Walk

While continuing to grow the new, expanded Central Pacific Bank, Clint Arnoldus takes time out to chair Saturday’s WalkAmerica

Arnoldus also had “tremendous support” from his family including his wife, Lesley, and six children, his co-workers and bank board. When things were especially difficult, youngest son Brad hugged his father and uttered, “Dude, are you all right?”

But Arnoldus prefers not to dwell on the past.

“People get too focused on what kind of experience it was for me,” he says. “I’ve had nothing but great experiences since moving here. People have made us feel so welcome. People went out of their way to make sure we knew everything we needed to know, offered introductions, and helped make the transition really easy.”

Eventually, the shareholders and directors of CB Inc. also came around. Saying the merger proposal reflected the “true value” of the company, City Bank board members said all is forgiven. One board member hailed the merits of combining the banks by stating that “One plus one equals three.”

“The merger has exceeded our expectations in every way,” Arnoldus smiles. “It’s been a great experience for everyone … in the technical integration, the cultural integration, and the consolidation of the operations.”

Due primarily to the merger, total assets increased by 115 percent, loans increased by 115 percent, and deposits increased by 90 percent. Also, market capitalization increased to $1 billion from $483 million in 2003.

Arnoldus just completed a road trip to visit financial analysts and institutional investors.

“In their minds, the merger is a closed chapter,” he says. “They had nothing but congratulations and what’s-the-next-step questions. This is consistent with feedback from our community.”

Keeping pace. “What’s next” is Arnoldus’ favorite topic these days. With 11 years of experience at the CEO level and more than 30 years of experience in banking, the priorities are pretty clear. It’s time to focus on the core businesses that benefit the growth of the bank. That means growing loans, core deposits and fee income. Do that,Arnoldus says, and the price of the stock will take care of itself. (NYSE: CPF 33.54 +0.09 on April 13).

How will CPB distinguish itself in the marketplace, where there’s only so much money to go around and only six banks to handle it?

“Personal relationships are important in business here, more so than other markets where I’ve worked. I find it refreshing. That’s what our style of banking is all about. It’s relationship banking,” Arnoldus answers.

“In our industry, there’s a great focus on efficiency and it’s measured as a ratio. Analysts and institutional investors follow it. Many nationwide institutions have changed their style so the customer point of contact is more automated and less humancentric because the delivery is cheaper. We’ve elected not to go that route.

“We’re not forcing new modes of doing banking on people. We’re not transforming the bank. Technology is there as a convenience for our customers, but we’ve always got the traditional, personal touch.

“I find Hawaii to be an environment where people work hard and have a tremendous work ethic. It’s very impressive how committed people are, how competent they are, and how accepting of change they are. You would think that change would be harder to come by in a market this isolated. We’ve implemented a lot of changes over the past three years, and people have been very accepting and stepped up to new challenges. I find that to be pretty extraordinary.

“People are open to change … as long as they understand why the change is happening and ultimately what it’s accomplishing.”

Bank senior vice president Wayne Kirihara says Arnoldus’ management style is “decisive, down-to-earth, and driven by a contagious positive attitude. Clint is brutally honest with everyone, and most importantly, with himself. Open communications is a significant part of his management style.”

“Let’s face it, if you’re going to say you’re fiercely loyal, you better be good because that’s a bold statement,” Arnoldus says. “We have confidence in who we are and how we’ve conducted business for 50 years. That fierce determination to have outstanding service is important to take into the market.”

The banking environment is becoming friendlier and more inviting too. Consider the interior changes CPB has made at its Kapolei and Mapunapuna branches.

“When you walk in, there’s an area that makes you feel like you’re walking into your living room at home,” the bank CEO says. “There’s an overstuffed chair, television, coffee table … to make people feel at home, to feel relaxed, and to know that we’re their friend and their partner.

“There’s also a whole shift going through the industry. There’s a tremendous wealth transfer with the boomer generation,” points out the 58-year-old bank officer. “Their parents are passing on, and boomers are inheriting their assets. Banks must be prepared with trust, investment and retirement services. The baby boomer generation has been very loyal to us, because their parents founded this bank. We are conscious of keeping the next generation as clients.”

Going the distance. Having walked through his company agenda, we ask Arnoldus for a bigpicture view of the community in which the bank operates.

What are his observations and impressions of Hawaii’s place in the global marketplace?

“We have to continue to work hard to diversify Hawaii’s economy,” he states. “The more diverse sources of income, the more stability we could have. As we try to develop, for instance, a technology base, opportunities and higher-paying jobs are created for young people here.

“We also need to make Hawaii as business-friendly as possible. Politicians, businesspeople and citizens can’t lose that focus. Also, a well-educated, competent work force attracts new industry.

“Hawaii’s got a very unique brand identity. It is a safe paradise that is becoming material in terms of investors and tourists coming here. The brand goes beyond that when you mix in the people … the aloha spirit. Hawaii’s brand works magic. We must be careful to preserve that.

“Economic development and preserving the brand are not mutually exclusive. But it has to be planned carefully.”

He adds, “We must look critically at Hawaii, just as the bank looked at itself from a customer standpoint. We must look at Hawaii as a tourist does. We might see some things that need work. As an example, go to Blow Hole. Geographically, it is spectacular. But look at the facility itself and see what kind of impression it makes on you.”

Spoken like a malihini turning kamaaina. Whether leading a bank or a band of charity walkers, surefootedness and the right attitude are essential.

It seems Clint Arnoldus and his team are headed in the right direction.

 

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